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Fri 15 Jan 2010 12:01 PM

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Dubai not lacking in regulation - Deloitte

Dubai World debt crisis hasn't exposed flaws in Dubai’s financial regulation system: CEO.

Dubai not lacking in regulation - Deloitte
BIF FIRM: Deloitte is one of the world’s largest accounting firms. (Getty Images)

The chief executive of Deloitte, one of the world’s largest accounting firms, said the Dubai World debt crisis has not exposed flaws in the emirate’s financial regulation system.

Dubai sent global markets into a tailspin in November, when it requested a six-month standstill on billions on dollars of debt at state-linked conglomerate Dubai World.

Deloitte is advising the group on restructuring $22bn in debt, owed to banks including HSBC, Lloyds Banking Group and Standard Chartered.

“When I look at the performance of the events in the Gulf, I don’t come to the conclusion that regulation has been woefully inadequate and they’ve been very ineffective,” Jim Quigley, chief executive of Deloitte told press, during a tour of the Gulf.

“Commentators would say there was a need for the whole process to be better managed from a PR point of view, but from a governance point of view…you have to separate between what are public listed companies and what are ultimately private companies. And clearly understand that governance is required but it’s not quite as public,” said Anis Sadek, managing partner, Deloitte.

Deloitte, which employs more than 2,000 staff across the Middle East in its auditing, tax and consultancy businesses, also sees growth in Dubai picking up as investors, who remained cautious during the crisis, inject fresh capital into the markets."We're seeing a pickup in investments globally, a lot of cash which has been on the sidelines is coming back in the market place," said Robert Kimmitt, a former US deputy treasury secretary, who is now chairman of Deloitte's Center for Cross Border Investment. “With regard to Dubai, if you just look at the number of financial institutions that have put significant operations here… it is an indication that …there is a regulatory regime that gives them the foundation upon which to conduct effective operations.”

Deloitte is upbeat on the prospect of global economic recovery in 2010, said Quigley.

“My researchers tell me that recovery in 2010 is ‘all but certain’. I haven’t heard that kind of certainty before.”

Arabian Business: why we're going behind a paywall

Karim Fastak 10 years ago

"all but certain"!!! So where were your researchers before the crash, were they certain then or not??? The truth is that no one has a clue what will happen, it is so unprofessional to come out with such "certain" affirmations in this environment. The problem is that no one is holding the experts accountable to what they say... so they just turn the spin on...

n m 10 years ago

I have read the article over and over and cannot really find a thing that makes common business since. It's more of a PR statement for his firm and a desperate position to show the govern that has appointed his firm as advisors for the restructuring of the debt that there is something nice to say. “….from a governance point of view…you have to separate between what are public listed companies and what are ultimately private companies. And clearly understand that governance is required but it’s not quite as public,” So now there is a different governance standard because a company is owned or partially owned by the government. What???!!! No numbers, percentages, facts!!! Talk to any one on the ground in Dubai and they will have a different point of view. Shame on him and shame on Arabian Business for publishing such an article witch has no merit.

Omar 10 years ago

It's very sad and unprofessional to hear such vague / loose comments from so-called top notch professionals!This crisis has taught me something tangible and obvious as the COO of a major regional financial services firm: The financial sector is just an industry of greed!!!Where were all those experts pre-the crisis. Well, they were driving Ferrrari and many of them are now flying Budget Carriers!!! The entire crisis is because of them and their greed. Another valuable point this crisis taught me is that economists are just followers of politicians and that yes and one million yes, an illiterate could be a successful businesman and a post graduate of a so-called top notch school could be a useless economist! I aksed a so-called private equity executive about the crisis and the market and his answer came to a surprise: I am absolutely clueless. It's exactly like a Boeing 777 captain telling his passengers i am clueless in an emergency landing!!!!!!!!!Why was he earning 20,000$$ then?To say clueless when his contribution is needed! This is the truth. Greed is beyond limits and all politicians have no other alternative but to curb this greed or hell would open its doors widely on this world!

MD 10 years ago

If the Chief Executive and Managing Partner of Deloitte have these comments to make, then can we really believe them? Yes, you can argue that regulations are there, and will be implemented more for public companies as opposed to private companies, the real question is why were these regulations not strictly enforeced, etc? Can someone explain why incidents like Nakheel and Damas and others happened?

The Grand Master 10 years ago

It is so sad to see the so called Professional sending out such message without any qualification and relying on a misleading generic statement. The fresh money your researcher found is not fresh as it may look, it is a greed money that is leveraging on financial crises Dubai and people invested in the Dubai are facing as we speak...it is not a money coming from investors who believes in Dubai model nor are planning to stay during good and bad times. The majority are another bunch of greedy individuals who will create a mess out of the mess. One thing that amaze me and prove it is just a PR statement: Deloitte is engaged in a professional/advisory work with the Government of Dubai and as per business conduct guidelines of firms similar to Deloitte, conflict of interest prohibit you from making such statements.

Amira Smith 10 years ago

I'm surprised to see the comments attacking the CEO. Grand Master - what money isn't invested for greed? Who invests in anything without the aim of a good ROI? That's why its called investment - not charity. I completely agree that the DW crisis was handled poorly, and that there was a lack of communication. However, I'm not sure that's due to a lack of regulation - but more a lack of enforcement. And again with the Damas debacle. Frankly, Deloitte's has an epic team of researchers tracking the global markets so their guess is as good as any re: recovery. I think we've all learned to take financial predictions with a pinch of salt over the last 18 months - but since a hunk of Deloitte's business comes from M&A, they're fairly well positioned to talk about the level of new capital in the markets. Just my two cents.

Phantom 10 years ago

I think Deloitte should stick to its core business: which is simply auditing and accounting : ex-post events (i.e. examining what has already happened) as opposed to trying to get into forecasting future events. Its an accounting firm at the end of the day. If they're so good at forecasting, then shouldn't they have told us something about the brewing trouble? It looks like some people defending Deloitte perhaps aspire to be Deloitte employees or are from the Deloitte alumni!!!

Amira Smith 10 years ago

I'm pretty sure as much of Deloitte's business comes from consulting as audits...